Australian shares are set to rise today, mirroring strong gains in New York, as the technology sector took centre stage, surging after a shaky start to 2024.
ASX futures pointed to an increase of 73 points, or 1%, to 7,505 early this morning.
Tech sector leads the gains
In a key week for inflation data and bank earnings, US markets saw a rebound. The Dow Jones index rose by 217 points or 0.6%, the S&P 500 index gained 1.4% and the Nasdaq index added 320 points or 2.2%.
The Nasdaq jumped more than 2% as Nvidia paced the gains – the tech giant’s shares jumped 6.4% to an all-time high after it announced new products to help the PC industry lure consumers with AI hardware.
Tesla (NASDAQ:TSLA)'s shares were up despite a Wall Street Journal story detailing recreational drug use by Elon Musk.
Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) shares were up, the latter more than 2%. Apple shares (NASDAQ:AAPL) also advanced significantly following a bad preceding week and Bitcoin had a surge, crossing $US47,000 for the first time since April 2022. This rise is attributed to expectations of a positive US regulatory decision on bitcoin ETFs.
The Aussie dollar has also shown resilience, trading above 67 US cents after a recovery from a low of 66.39 US cents last week.
US inflation figures due
In the US, the dollar and Treasury yields fell ahead of a crucial US inflation report, which could signal when the Federal Reserve might commence cutting interest rates.
Raphael Bostic, president of the Atlanta Federal Reserve, remarked that inflation had declined more than anticipated and was on track to meet the central bank's 2% target, though he cautioned that it was premature to declare victory over inflation.
Back home the focus is on the domestic economy with the scheduled release of the November retail trade and building approvals reports today.
Economists are expecting an increase in retail trade, boosted by Black Friday sales, but a drop in building approvals, reversing the previous month's gains.
Energy stocks slump
The energy sector is likely to face scrutiny after oil prices slumped following price cuts by Saudi Arabia, the top exporter.
Brent crude dropped 3.4% to $US76.12 a barrel, and West Texas Intermediate crude futures tumbled 4.1% to $US70.77.
This decline comes after both contracts climbed more than 2% in the first week of 2024 due to heightened geopolitical risk in the Middle East.
In other news, Boeing (NYSE:BA)'s reputation took another hit from an accident involving Alaska Airlines over the weekend, which prompted a slump in its shares. Not so American Airlines (NASDAQ:AAL), which soared 7.2% after Morgan Stanley (NYSE:NYSE:MS) upgraded the shares to overweight from equal weight.
Market highlights
- On Wall St: Dow +0.6% S&P +1.4% Nasdaq +2.2%.
- AUD +0.2% to 67.23 US cents.
- Bitcoin +6.8% to $US47,183 at 8.43am AEDT.
- In New York: BHP (ASX:BHP) +0.00%, Rio +0.3%, Atlassian +4.2%.
- Tesla +1.3%, Apple +2.4%, Nvidia +6.4%, Amazon +2.7%.
- VIX -2%, QQQ +2.1%, TLT +1%.
- Stoxx 50 +0.5%, FTSE +0.1%, DAX +0.7%, CAC +0.4%.
- Spot gold -0.9% to $US2028.07/oz at 2.21pm in New York.
- Brent crude -3.5% to $US76.04 a barrel.
- US oil -4.2% to $US70.74 a barrel.
- Iron ore -0.5% to $US137.85 a tonne.